This was such a blatant price-fixing scheme among the publishers that it's surprising to me that it took the DOJ this long to take action. That said, based on what I've read I'm not completely convinced of the extent to which Apple was involved in this. Yes, they agreed to the new agency pricing model, but it seems to me that they could try to argue, "Hey -- the publishers came to us with this idea. We didn't know they wanted to go that route to reduce competition and put pressure on Amazon! Honest!" But if there's a paper trail mentioning Amazon, I think Apple is toast.

And regardless, I hope the publishers get crushed on this one. While I won't go so far as to suggest that they don't serve any useful purpose anymore (as some people do), they _are_ dinosaurs and need to be dragged into 21st century competition. This should do it.

wasn't it in steve jobs biography him stating that ebooks couldn't be cheaper than in the itunes store or he wouldn't allow them to be in the store at all? That seems that Apple would have actually been the driving force.

A "most favoured nation" clause restricts the price that company A can charge company B for something. Apple's restriction is different - they limit the price that company A can allow company B to resell its products to consumers for, which is price fixing.

How do you enforce this? The amount of work that would be necessary to track down these competitive bids is prohibitive and might not be legal, in some cases. For that matter, why not just run a reverse auction if you suspect better pricing is available?

One of the things that might bury Apple is the "you cant have your ebook priced cheaper anywhere else" requirement - with the price including Apples cut.

The above clause doesn't seem to hurt consumers, we all get cheaper prices so why would the DoJ have an issue with it? The issue is whether the agency model of selling books is causing prices to be artificially inflated over the wholesale model.

You couldn't be more wrong, as is apparent from the fact that prices went up, not down.

This was not a case of Apple coming in and saying 'Amazon is selling books for $10 - that is too much. We want a better price than that.' This WAS a case of Apple saying 'Amazon is selling books for $10 - that is too little. We want to sell them for $20. BTW - make sure Amazon can no longer sell them for $10.'

Not ownership, but you can only sell non-free output from iBooks Author on the iTunes store. Which does not prevent you from using any other way to format your content and sell it elsewhere. The iBooks Author is just Apple's free "SDK" for their proprietary ePub extensions format.

The thing is....why didn't this happen YEARS ago with physical books? Those have been price gouged for a long, long time, especially when they have 12 editions with maybe a handful of pages' worth of difference between the first and the last.

It's an interesting point. But the reason is that to my knowledge, there _wasn't_ any price fixing prior to ebooks. I believe that publishers have always sold physical books to retailers using the wholesale model, and then leave it up to the retailers to set the price paid by customers. As long as the publishers didn't conspire to set those wholesale prices collectively, then there's no price fixing. There may have been some 'tacit' collusion (in that they don't formally agree upon prices, but that they follow each other like airlines), but that's generally not illegal in the US.

The issue in this case is that there _is_ evidence that the publishers collectively decided to adhere to the same pricing scheme. That is illegal.

Worst case they pay a small (for them) fine without admitting wrongdoing, and promise never to do it again. What happens then?

Well, Apple can sell their books at cost or below because their profit comes from hardware. The iTunes store is a tiny blip in Apple's revenue, and ebooks a small part of that tiny bit. The publishers can raise the price Apple, Amazon, and others pay for ebooks, and will to preserve their income. Amazon gives away their hardware at cost, so somewhere they need to start making profit on media. It is widely believed that Amazon is selling many books below publisher's cost in order to drive others out of the business. Once it is clear that Apple can (and will because they have lost the agency model) match Amazon's prices and is in the ebook business to stay, Amazon won't be so anxious to lose money. Then prices will come back to where they have been, maybe even higher.

Apple still breaks records every quarter, Amazon chugs along on its slow growth curve, the publishers keep making some money, and 99% of authors still starve. Nothing's going to change.

Nobody is getting 'crushed' on this. At worst, a couple of publishers and Apple will pay a fine. Most likely they will sign something that said 'we didn't really do anything, but we agree not to do it again'. Some lawyers will make money. The DOJ lawyers will carve another notch in their desks.

You do realize that the price of crude oil (and therefore gasoline) is determined by the spot market, and therefore the oil companies have (almost) nothing to do with the price of gasoline you pay at the pump?

You do realize that the price of crude oil (and therefore gasoline) is determined by the spot market, and therefore the oil companies have (almost) nothing to do with the price of gasoline you pay at the pump?

Come on, man, don't you know that high prices are rock solid evidence of anti-competitive collusion? You must be a one-percenter.

Exxon's profit not only comes from the shear volume of sales but they make a margin throughout the petroleum delivery chain. They spread their revenue across drilling, transportation, refining, pipeline traversal, wholesale, and finally retail.

I have a book in the iBookstore. I set the price on it. Apple sells it for that price and gives me 70%.
I have the same book in the other bookstores. I have no control over the price. They give me what they want, which is half of what Apple gives me. I have no choice or say in the matter.
And the Department of Justice sues Apple? That's just wrong.

If you have control over whether it's in those other bookstores, then, yes, you do have control over the price. You don't like their terms, don't publish it there. That's how you control it.

The problem being, what if there is only one option that dominates the industry by luring people in by selling Hunger Games below the price they paid for it? Everyone buys that reader, uses the built in store, and you can either pay them what they ask or go away and not do business. That is why establishing dominance through dumping is against antitrust law, which is what Amazon was doing. Why is the DOJ not going after Amazon again?

My understanding of the issue is that the speaking point isn't that they're setting the price, but rather that they require you to sell your book for at least that price if you put your book in another book store. Basically it ensures that iBooks is on-par with the lowest price available. Is my understanding incorrect? I'm not a publisher or a writer, but stacking it so that iBooks has the lowest price available seems to be kind of shifty.

But REQUIRING it? I don't think Apple should be able to affect your pricing model on somebody else's store. What if Amazon (for example's sake) wants to feature a book put it book on sale to generate more purchases? If that sale price falls below Apple's pricing, the author suddenly finds himself between a rock and a hard place. I don't think it's fair to require the author to choose between taking Amazon's offer or keeping their book on iBooks.

What is (alleged) to be happening is that Store A (Apple) sees that Store B (Amazon) is getting a better price, so they pressure the publisher to raise the price they sell to Store B (Amazon). The publishers are happy to follow Apple’s lead and crank up the price for everybody.

What you really want to do is study the structure of the market. The buyer, seller, and the middle man gains in a transaction – If they didn’t then there would be no transaction. However, the next question is how the

What is shifty about wanting the best price? If Store A sees that Store B is getting a better price from the manufacturer of course Store A wants the manufacturer to match that price.

The issue is not about the manufacturer's price to stores A and B, but the sale price.

Store B can't discount it below Store A's sale price(which has 30% profit margin built into it). So if Store B is okay with just 20% margin, they can''t sell it for that, because that would violate the manufacturer's contract with store A not to have it on sale anywhere for less. Note that the manufacturer's price is the same to both stores in this example.

You wield no market power, so you can do whatever you want with your book price. The publishers targeted by the lawsuit exert a combined market power so great as to be able to control the market when in collusion. This is why they are being sued, and rightfully so.

What he's referring to is the fact that Amazon retains the right to cut the price of the books in their Kindle Store without compensating the author. So even if your book costs $20 normally, Amazon can put your book on sale for $1 and give you the same percentage - NOT THE SAME AMOUNT.

Historically Amazon said "Ok, we want 1,000 of ebook X. What do you want for it" and then bought 1,000 of ebook X at wholesale. Apple came along and said "Hmm, tell you what, we'll let you set the price and we'll sell the books for you and keep 30%" Suddenly, the publisher can go to amazon and say "Well, sorry, we will only sell like this now, and if you don't like it too bad, we'll still be able to sell through Apple".

I have a book in the iBookstore. I set the price on it. Apple sells it for that price and gives me 70%.

I have the same book in the other bookstores. I have no control over the price. They give me what they want, which is half of what Apple gives me. I have no choice or say in the matter.

And the Department of Justice sues Apple? That's just wrong.

Eh what? The problem is that Apple is forcing the 30% margin on all sellers.

Lets take your example and you set your price at $10 at iBookstore. Apple takes $3 and gives you $7.

You want to sell it at Amazon so you sell the book to Amazon at the same $7. But Amazon HAS to sell it at $10. They cannot take only $2 and sell it at $9 because of your contract with Apple to not have it on sale anywhere else for less than $10. This is price fixing and artificially raises the cost of the books to the consumer for Ap

Imagine if Walmart put this rule saying that no store can sell any products that they sell at a lower cost.

I think Radio-Flyer doesn't need to imagine this. There are plenty of documented cases of Walmart using their dominant retail position to strong arm companies into lowering their product's pricing by a set percentage each year and offering Walmart the best discount possible.

Hell it made news when Snapper lawn mowers refused to bow down to pressure from Walmart.

They are not claiming that independent authors are conspiring together to set prices. Clearly there is no price fixing going on among indepedents. Books from independents are cheap and sold at several price points. They are saying the publishers conspired together not to compete on price. They are saying Apple assisted them.

They are asking why prices went up from $9.99 to $14.99 uniformly for ebooks sold by publishers after Apple entered the market. New competition is supposed to drive prices down not up. C

They are asking why prices went up from $9.99 to $14.99 uniformly for ebooks sold by publishers after Apple entered the market.

Nothing wrong with asking. I wouldn't be surprised to find that the reason the prices went up was due to Apple not taking a loss in order to sale a dedicated eReader like Amazon does and publishers preferring to do business that gave them more favorable terms. Nobody is forcing consumers into purchasing an iPad nor are iPad users forced to purchase their books from Apple. You can st

eBooks take the "convenience fee" to the extreme, but it's really no difference than TicketMaster charging me $10 to buy the ticket online or my water providr charging $2 to pay online (on top of the 3% credit card fee). Reserving a campsite online was also $9 extra.

No, it's no different from my other examples. The last tickets I bought online, I printed out myself. Same thing with my receipt for paying water bill online and reserving a campsite. There's still no shipping and the only printing is done by me.

It doesn't happen often but sometimes the e-edition is cheaper. One of my magazines, Fantasy & Science Fiction, is 1/3rd the cost through the electronic edition versus the paper edition. i.e. I save ~$24 per year.

The paperback was $38 shipped and the downloadable version was $97. Excuse me but that's insane.

This is probably an extreme example of the difference between the wholesale vs the agency model pricing. The retailer sets the price under the wholesale model, while the publisher set the price for the agency model. In this case the publisher wanted to sell at $97 while the retailer, with its deep wholesale discount, chose to sell it at $38.

It is worth mentioning that it is widely believed that price fixing by Apple et al is a response to perceived dumping (selling at a loss) by Amazon.In other words, it may be a case of using one form of anti-competitive behaviour (price fixing) to battle a different form of anti-competitive behaviour (dumping).http://www.theglobeandmail.com/news/technology/tech-news/us-sues-apple-publishers-on-e-book-agency-model-price-fixing/article2398161/

Since launching the Kindle in 2007, Amazon has made a point of offering best-sellers for $9.99. The discount is so deep from list prices of $20 and more that it's widely believed Amazon is selling the e-books at a loss as a way of attracting more customers and forcing competitors to lower their prices. Amazon also has been demanding higher discounts from publishers, and stopped offering e-books from the Independent Publishers Group, a Chicago-based distributor, after they couldn't agree to terms.

When Apple launched the iPad two years ago, publishers saw two ways to balance Amazon.com's power: Enough readers would prefer Apple's shiny tablet over the Kindle to cut into Amazon's sales and the agency model would stabilize prices. Apple's iBookstore has yet to become a major force, but publishers believes the new price model has reduced Amazon's market share from around 90 per cent to around 60 per cent, with Barnes & Noble's Nook in second at 25 per cent. The iBookstore is believed to have 10 to 15 per cent.

Why is a loss selling a digital version of a book at the same or similar enough price as the paper version, that have a physical space, a bunch of intermediaries, have to be transported (sometimes overseas) and must be stocked by libraries while covering in the price not selling all, or being stolen or whatever? The price of ebooks should be 99% author profit, and still would make a huge profit for amazon/apple/b&n/etc.

First off, the publisher doesn't have any of the issues that you are talking about - printing and shipping books is really cheap. Maybe $2 for most soft-cover books and maybe $0.25 to ship it (with others in a box) anywhere in the US. After it gets there, it is the book store's problem which does not affect the price the publisher is charging. Same thing with getting stolen - not the publisher's problem.

Most of the book's cost is the editing and promotion. No editing has been tried and it sucks. You ca

Contrary to popular belief, there is nothing illegal about selling at a loss. Microsoft does it with Windows. Apple does it with OS X. Sony and Nintendo and Sega do/did it with their consoles. Shaver and razer makers do it with with their shavers/razers (and make money off the replacement parts like blades). Stores do it with "loss leaders" like $50 bluray players that cost $150, in order to attract customers to the building.

None of that is illegal, and neither is what amazon is doing with its low-pric

Dumping would be Amazon selling all of their books below cost for a year, taking huge losses to force Barnes & Noble out of business, then raising prices on everything. As long as Amazon is making a profit on nearly everything they sell, it is not dumping. Selling a $20 book for $10 is merely the use of loss leaders to draw customers in, nearly all of whom will then add another $15 worth of profitable merchandise to their carts in order to get free shipp

I'm glad they finally got around to this, but what about audio books? The same scheme appears to be in place. It's absolutely ridiculous that I can buy a hollywood (or indie) movie download for $5-$10, but it costs me $10-$30 for an audio book.

The market for audio books is small compared to printed books or movies. Hiring good talent to make decent audio books is higher than you expect (And this is something that you want – I listened to some pretty bad audio books in my life.) So you have higher fixed costs per unit sold – have to make up the difference someway.

It’s one of the reasons why I get most of my audio books via the library.

1) Collusion- OK, that bad.2) Publisher/seller model. Why couldn't the publishers sell the e-books (individual ID per copy) to the end sellers at a price, just like they do now for physical books. Then the end seller could decide on the end price. I admit I don't have any e-books, so I'm not conversant in this area.

Well, I stand at least somewhat corrected. Not all of the eBooks are cheaper. Some of them are actually more expensive, which is absurd. I'd think the publishers would love them because students can't buy used eBooks, but this may have merit. Still, it's frustrating that they do this only now when the price-fixing has been going on for years and years in physical books.

Dumping is the act of charging a lower price in a foreign market than one charges in the domestic market. They are not dumping, they are selling loss leaders, an action common in every brick and mortar supermarket or electronics store.

To be more precise, loss leaders are promotions designed to get people into a store. However if you're selling below cost with the purpose to drive the competition out of the market, that's predatory pricing, which the DoJ will sometimes go after if they can prove you're trying to establish a monopoly.

My take is that they seem to be a stalking horse for whoever has the most influence in government.

I think it is almost a tautology to say that the government represents the interests of whoever has the most influence in government (a more precise statement might be that government represents the combined interests of all people, weighted by each person's degree of influence over government.)

Apple provided a competing service that included letting the publishers set the final price because Apple was just run

Here's what's going on. Steve Jobs wanted 100% of the saving of switching from print to ebooks to go to Apple, not users or publishers and authors. However, he didn't want to drive customers away with higher prices. So, how do you suck 30% of the revenue out of an industry as pure profit without adding value or inviting unwanted competition? This is pure Steve Jobs evil marketing genius, and one reason to be glad he's dead.

The answer is the "agency model" combined with "most favored nation status". The agency model eliminates the likes of Ebooks.com and Ebook Depot, where you could often go and find an ebook for $1 or $2 less than Amazon. By forcing the industry to go to the Agency model, an ebook costs the same no matter where you buy it, eliminating any priced based competition, and reducing the consumer's choice to a matter of convenience, where Steve could dominate with the iPad and iTunes. Just for good measure, he removed any apps that also sell e-books from the App Store, like Sony's e-book app.

However, the big publishers wanted all of the profits for publishing as ebooks and then some. They pretty much wanted to screw authors, users, and the ebook stores, and were hopping mad at Amazon for forcing them to sell at $10 while Amazon took a bigger share of the profits than was even close to reasonable (over 50% for small publishers). In dealing with Apple, they loved the agency model and immediately raised prices, and of course they wanted all of the revenue. Statements like "4% would be a reasonable fee for the digital distributor" were common. Rather than bicker with each publisher like Amazon did, Apple simply demanded the lowest price the publisher offered anyone, meaning Amazon's price. Thus, Steve gets just as good a deal as Amazon had for so long. And in this case, he gets tons of cash with no work, and no added value in the chain. On the positive side, he did lower Apple's cut for doing nothing to 30%, or roughly 100% of the savings for going digital. Amazon responded by requiring their publishers also give them the lowest price, and then even Google jumped on board. Thus over 90% of the distribution channel for ebooks agreed on one thing: Apple, Amazon, and Google get 30% for doing almost nothing. Screw users, authors, and publishers. Between them, they have become the new gate keepers, sucking money out of you and me and crushing independent stores and sales channels. It's about time the DoJ looked into this!

This anti-competitive price fixing pisses me off. In the age of digital media, authors should be closer than ever to their readers. Publishers are still needed for editing and marketing, as books rarely become best sellers by themselves. However, the lower cost of digital distribution should mostly go to us, the consumers. If a print book is $10, I want the ebook for $7.

I got so upset at how all these companies are screwing the consumers over, that I came up with a potential solution. I've got a stalling effort to create Ebooks.coop. Members of this coop would pay for ebooks through the coop at the same price as they would using iBooks or a Kindle, because of the agency model. The coop would hopefully get close to the price from publishers as Amazon and Apple. Thus, for doing pretty much nothing, Ebooks.coop would make an unreasonable amount of money on each sale. At the end of the year, members would be mailed a check for their share of the profits, which would be proportional to how much they spent at the coop. This should enable us readers to "earn" most of that 30% savings.

The main reason I've stalled on this effort is DRM. I have difficulty reading print or a computer screen, and use text-to-speech software to read ebooks. Fortunately, I can get many popular ebooks almost for free from Bookshare.org, because of a loop-hole in copyright law specifically designed to help the blind. However, most ebooks are not available there, so I am forced to break the DRM manually, which is a huge pain, and always a moving challenge as publisher

The Republicans don't want it solved, they've blocked EVERY attempt to put proper regulation on the oil speculation market (which is where the prices are being driven up far beyond normal market pricing) because they get tons of donations from the oil speculators and kickbacks from oil industry execs in exchange for federal subsidies.

It has nothing to do with whoever is in office. The US has no control over an internationally traded commodity and never will. The US can only *temporarily* affect the market. The US can dump several million barrels on the market and OPEC will just cut production the same amount. No effect. So regardless of which party you hate they can do nothing and anyone claiming they can is a liar.

Until the US can import no oil at all they are subject to the international price and even then I am not certain though I would think you would have more power to control domestic prices if it is all internal. Now the subsidies are another matter, but I don't know enough about them to know whether they are having an effect, positive or negative, on domestic oil prices.

Caused???? Are you crazy, the 'Bush Depression" was caused by every idiot that bought a house they knew they couldn't afford if there was any kind of ripple in their finances. Truth be told both parties were responsible for the trouble we are now in. The Pub's repeal the controlls and the Dem's pushed bad policies based on the belief that 'everyone had the RIGHT to be a homeowner' (wether they could afford it or not).

It's the difference between wholesale and agency models that brings about the curious discrepancy in prices. Print books fall under the wholesale model: they are bought at a discount from the publisher and the retailer gets to set the price they sell at. Whereas for eBooks, sold under the agency model, publishers set the price on the book and the retailer gets a percentage of the sale. Under the wholesale model the retailer can choose to make a particular book a loss-leader or negotiate a deeper volume discount so that they can offer lower prices. The retailer has no control over the pricing for the agency model.

The agency model is what Apple and the publishers are being sued over. The retailer doesn't have control over price because of the price fixing. Thus you get wierd things like ebooks costing more than discounted physical books. I think physical books will still sometimes cost more than ebooks even if the agency model goes away. At some point physical bookstore need to clear their inventory. They do this by selling unwanted books at cost. Ebook stores don't have inventory issues so they will never offer discounts. Of course no one cares about this. These are unwanted books. People don't like the price difference on best sellers on release day. That problem will be solved.

The publishers know they entered the eBook business because they were afraid of the example of the movie and music industries and rather than allow their "disintermediation" (Sargent's word) they made sure none of them using the agency model would set eBook prices below a certain bar, thus destroying Amazon's so-called "monopoly" position.
Apple has a hand in facilitating the price-fixing and should be punished accordingly.
The book publishers, on the other hand, deserve to burn in hell.

Well. Since ebooks seem to be priced at higher than print book prices....no. no they are not cheap at all.

The thing that people seem to forget when arguing that ebooks should be cheaper is the fact that it costs money to have a paper based book sit in inventory. Eventually the publisher and/or retailer will be willing to take a loss and sell that book at a steep discount in order to make room for a more popular book with more potential to make a sale.

The point is that if the market was working as it should, the lower costs would have gotten passed on to the consumers at some point of time. Even if you say that printing, transportation, storage, paper, ink etc are not much (which I don't believe), it's still something. Even a price reduction of 50 cents would indicate that. Instead, we see nothing - no price reduction at all. And possibly even higher prices!

This is an oft-repeated meme on slashdot, and for the most part it is just plain wrong.

The only time that statement is true is when there are multiple sources of a product, and there is no difference between the products (or the purchasing thereof) except for price. For instance, supposing there are two sellers of product X, selling the exact same item. Retailer A charges $2 and has the product available today. Retailer B only charges $1, but you have to wait a month to get the product. Those two purchases are NOT identical, and the fact that retailer B is charging only half of what retailer A is charging is not going to cause A to lower his price.

Now, for the comparison between paper books and e-books. The first, most obvious, thing is that ebooks and paper books are not the same thing. Therefore, comparing their prices is meaningless. Sure, they both have the same content. But beyond that there are value adders and detractors. Is paper an adder or detractor? Depends on the purchaser. Some people would pay more to have a physical book. Some people would pay more to NOT have a physical book they have to carry around, store, and dispose of.

If people are willing to pay more for an ebook (ie the ebooks are selling), why is the market not 'working as it should'? If people are not willing to pay more for an ebook (the ebooks are not selling), why is the market not 'working as it should'? The market works both ways - sometimes prices go up, sometimes they go down.

No, the DOJ action is not about ebooks costing more than paper books, or even that the cost of ebooks is 'too high'. The DOJ action is about Apple conspiring with the publishers to ensure that Apple does not have to compete with anyone on price. That is illegal.

Anyone is free to set whatever price they want on the goods they are selling (except in certain situations, like necessities during an emergency). The market will decide if the price is too high or not.

Well here's the spin I just heard on MSNBC (you can decide how accurate it is). "The standard price for ebooks was $9.99 but when Apple started selling them, they colluded with the publishers and raised that price to 14.99 or even 19.99. So claims the DOJ."

If that is true, it's called price-fixing and forming a cartel. It is illegal under U.S. Consumer Protection Laws (antitrust).

Don't know if the "collusion" bit is true, but Shyster and Shyster books are all $19.95 on Amazon and Kobo, even while the paper version of the same book is going for $6. They used to be less than the paperback, which is why it made economic sense to buy an ereader, since you'd eventually make the money back in book savings. Now you're paying treble for a book you cannot lend, resell, or give away.

Well the DOJ is claiming the prise went up for the same reason discount CDs suddenly rose from $9.99 to $12.99 (during the 90s/early 2000s). The publishers were colluding with one another to set a high price.

Before Apple started with the agency model, the "average" price for eBooks at Amazon was, indeed, lower than those prices today. Amazon was selling the books at a loss in order to sell more Kindles [knowledgeproblem.com]. This infuriated the book publishers, out of concern that Amazon was devaluating the book in general with prices that low. The book publishers had no control whatsoever over the retail price. Combined with Amazon's weight, the publishers had no choice but to just "suck it up".

>>>The book publishers had no control whatsoever over the retail price. Combined with Amazon's weight, the publishers had no choice but to just "suck it up".

Awww. I feel as sorry for the publishers as I do for the Record and Hollywood companies declining song/movie prices (not). And the "collusion" part comes from the price-fixing by the publishers with one another. Perhaps you do not think that should be illegal, but it is under US Antitrust legislation..... as the record companies found out

The question is whether or not Apple participated in the price fixing.

Assuming the specific allegations (including the direct quotes from e-mails and other documents) in the complaint are true, they were deeply and actively involved in the collusion to raise prices, and actively pushed the usefulness to the publishers or entering into an agreement with Apple to advance there existing collusion in that regard as a selling point to get the publishers signed up.

I was reading the Year's Best SF of 1992. The intro provides a summation of the state of the industry, and it said the publishing industry was "dying". A quick scan through the 1997, 2002, and 1987 editions had the same dire prediction of publishing going away: Magazines no longer existing and books ceasing to be published.

The only difference is today they blame amazon and "too cheap ebooks". Back in the 90s and 80s, they were blaming TV and movies for stealing-away audience. Whatever the cause it's always the same tired song-and-dance.

Ever heard the story of the boy who cried wolf? After awhile people stopped believing the boy's claims of seeing a wolf. Well I view the publishing industry the same way. They've been crying wolf for 25 years. Instead of fighting technology, they should embrace it.

Actually, no, the DoJ's angle on collusion appears to be (from actually reading the complaint [justice.gov] -- see the section "VI. DEFENDANTS' UNLAWFUL ACTIVITIES" beginning on page 12) the series of communications between the publishers in which they conspired to jointly raise the retail prices of e-books by establishing the agency model as standard, which was initiated prior to Apple's attempts to enter the e-book market, and continued after that entrance (

Basically, Apple says, "We get the cheapest price." Which means that I can't set the price on Apple's bookstore to be $14.99 and sell it via my own website for $10.99. Makes perfect sense.

The problem is, Amazon does not use an Agency model. It uses a wholesale model. Which means Amazon buys, say, 1,000,000 copies of "Hunger Games"--both the "E" and "Print" version--at half the retail price, which we'll say is $8.99. So Amazon writes them a c

It sounds like the DOJ has evidence that collusion occurred. From the complaint filed today: "As a result of discussions with the Publisher Defendants, Apple learned that the Publisher Defendants shared a common objective with Apple to limit e-book retail price competition, and that the Publisher Defendants also desired to have popular e-book retail prices stabilize at levels significantly higher than $9.99. Together, Apple and the Publisher Defendants reached an agreement whereby retail price competition would cease (which all the conspirators desired), retail e-book prices would increase significantly (which the Publisher Defendants desired), and Apple would be guaranteed a 30 percent "commission" on each e-book it sold (which Apple desired)."

More text from the complaint [justice.gov] suggesting that DOJ has hard evidence:

"Beginning no later than September 2008, the Publisher Defendants' senior executives engaged in a series of meetings, telephone conversations and other communication in which they jointly acknowledged to each other the threat posed by Amazon's pricing strategy and the need to work collectively to end that strategy. By the end of the summer of 2009, the Publisher Defendants had agreed to act collectively to force up Amazon's retail prices and thereafter considered and implemented various means to accomplish that goal."

"The Publisher Defendants directly discussed, agreed to, and encouraged each other to collective action to force Amazon to raise its retail e-book prices."

"Publisher Defendants took steps to conceal their communications with one another, including instructions to 'double delete' e-mail and taking other measures to avoid leaving a paper trail."

"They received assurances from both each other and Apple that they all would move together to raise retail e-book prices."

"All five Publisher Defendants agreed in 2009 at the latest to act collectively to raise retail prices for the most popular e-books above $9.99. [Then quotes internal email]."

"Apple concluded that competition from other retailers, especially Amazon, would prevent Apple from earning its desired 30 percent margins on e-book sales. Ultimately, Apple, together with the Publisher Defendants, set in motion a plan that would compel all non-Apple e-book retailers also to sign onto agency or else, as Apple's CEO put it, the Publisher Defendants all would say, 'we're not going to give you the books'."

"As it negotiated with the Publisher Defendants in December 2009 and January 2010, Apple kept each Publisher Defendant informed of the status of its negotiations with the other Publisher Defendants. Apple also assured the Publisher Defendants that its proposals were the same to each and that no deal Apple agreed to with one publisher would be materially different from any deal it agreed to with another publisher."

"Each publisher defendant rquired assurances that it would not be the only publisher to sign an agreement with Apple that would compel it either to take pricing authority from Amazon or to pull its e-books from Amazon. The Publisher Defendants continued to fear that Amazon would act to protect its ability to price e-books at $9.99 or less if any one of them acted alone. Apple supplied the needed assurances."

"Near the time Apple first presented the agency model, one Publisher Defendant's CEO used a telephone call, ostensibly made to discuss a marketing joint venture, to tell Penguin USA CEO David Shanks that 'everyone is in the same place with Apple'."

"On the evening of Saturday, January 23, 2010, Apple's Mr. Cue e-mailed his boss, Steve Jobs, and noted that Penguin USA CEO David Shanks 'wanted an assurance that he is 1 of 4 before signing'."

There's about 20 pages worth of evidence, with email and telephone conversations quoted. This will be a big case. It looks like Steve Jobs and the publishing companies' CEOs were personally involved in the conspiracy.

Lets see. I can download a best-selling song for $0.99. I can download a best-selling app for $1.99. I can download a best-selling book for $19.99. Yeah, something's wrong there. At the very least, ebook prices should be closer to paperback prices than hardcover prices. Ideally they should be similar to song & app prices.